Turkey's government says it will exhaust all diplomatic channels before launching a military strike into northern Iraq to root out Kurdish separatists, who killed at least a dozen Turkish soldiers in fighting at the weekend.

Turkey has built up its forces along the border with Iraq in preparation for a possible incursion against rebel bases, although Prime Minister Tayyip Erdogan has pressed Iraq to curb the PKK first.

''If expected developments do not take place in the next few days, we will have to take care of our own situation,'' Erdogan said in a speech in Oxford, England, yesterday.

Washington and Baghdad have called on NATO member Turkey to refrain from a military push into the largely autonomous Kurdish region, one of the few relatively stable areas of Iraq since the US-led invasion of 2003.

US President George W. Bush expressed ''deep concern'' yesterday about Kurdish rebel attacks and told Turkish President Abdullah Gul the United States would continue to urge Iraq's government to act against the PKK rebels, the White House said.

Bush also spoke with Maliki and the two agreed to work with Turkey to stop the PKK from carrying out attacks from Iraq.

Secretary of State Condoleezza Rice and Britain's visiting foreign secretary, David Miliband, said they had proposed a meeting in Istanbul next month of officials from the United States, Turkey and Iraq to discuss how to stop the attacks.

MILITARY PRESSURE Erdogan will hold talks with his British counterpart Gordon Brown in London today.

Iraq's Talabani said yesterday the PKK would announce a ceasefire. Later the guerrilla group said in a statement it was ready for peace if Ankara stopped its military offensive against Kurdish fighters. It made no mention of a ceasefire.

Erdogan is under public and military pressure to strike in Iraq against the group which has killed some 40 Turkish soldiers in the past month.

The Turkish military's General Staff said 12 soldiers died in Sunday's fighting and 34 rebels had been killed in an army offensive backed up by attack helicopters and artillery over the past two days.

The pro-PKK Firat news agency said eight soldiers had been captured in the fighting. Turkey has denied any of its troops were captured, but confirmed eight soldiers were missing.

Turkey buried the 12 dead soldiers today. Television images of grieving mothers, wives and children added to the pressure on Erdogan to take action. Anti-PKK rallies have been staged in many towns and cities across the large Muslim country.

Turkey, which estimates 3,000 PKK rebels are based in Iraq, has deployed as many as 100,000 troops, backed by tanks, F-16 fighter jets and helicopter gunships along the border.

Ankara believes US occupying forces in Iraq could, if they wanted, capture PKK leaders hiding in the Qandil mountains, shut down their camps and cut off supply routes and logistical support.

But Washington is hesitant because such moves could destabilise Iraq's Kurdish region and hurt the regional authority there if it looked as if it were siding with Turkey against Kurds.